Leveraging Customer Knowledge

Maybe you started your small business to have more freedom and satisfaction in your work. Or you have taken over the family business and carried on its legacy of serving your local community. There can be a fulfilling sense of accomplishment that comes from running your own business.??

However, it is not always easy being small. Your cost structures can be at a disadvantage, resources are limited, and you often put in long hours living in your company's operations, not the executive suite.??

Yet, there can be advantages to being small.?

The Advantage of Working Closely with Customers

Small business owners have an advantage in being able to interact regularly with their customers, while corporate leaders often work distant from customers day to day.

Chan Kim and Renee Mauborgne, in their book Blue Ocean Shift, shared the example of how one Detroit automaker provided its executives with full-service car maintenance, washing, gas top-offs, and repairs while they worked (2017, p.159).?

The problem was that this perk insulated the executives from the average consumer's pain points of owning a vehicle (Kim & Mauborgne, 2017, p.159).?

How can you understand your customers' needs if you never experience them??

As a small business owner, you have an advantage by regularly interacting with your customers. On a day-to-day basis, you work to grow customer loyalty through the customer experience. Customer loyalty is crucial for small businesses as they often rely heavily on customers' word-of-mouth marketing.

Studies show that strong customer loyalty leads to:

• faster revenue growth
• higher customer retention?
• Customers who are more willing to forgive a bad experience
• Customers who are 59% more inclined to recommend to a friend (Qualtrics, 2023)?

Proximity Does Not Equal Understanding

However, small businesses are not inherently better at?understanding?the customers they interact with daily.??

Consider a local plumbing company; they interact with their customers daily, yet when was the last time a licensed plumber was the customer and hired a plumber to do repairs at his own house?

It's easy to suppose we understand our customers because we interact with and serve them regularly. But that doesn't mean we understand their needs, pain points, or experience with our company.?

A key strategy in design thinking is to conduct empathetic research to discover customers' needs.?

Imagine the insights that a plumber would have if he called another plumber to work on his house.??

• How would he feel if it took three calls before someone answered the phone??
• What would it be like to have a stranger enter your home??
• After the job finished, would the mess left behind bother him???
• Would his wife complain about the odor from the soldering and sealants???

The experience would likely grow the plumber's empathy for his customer's pain points.??

Here are Four Ways a Small Business Can Strengthen the Customer Experience:?

1. Create an Empathy Map for Each Customer Segment.??

A customer empathy map builds an understanding of the customer's needs and perspective. The map can be developed from customer interactions, reviews, observations, and design research. An empathy map can be treated as a living document recording ongoing insights, revealing patterns and opportunities for innovation.??

2. Design a Customer Journey That Identifies Each Customer Touchpoint, Pain Points, and Gains.

Familiarity can make us blind to customer experience at different touch points. Over time, we no longer see everyday problems.?

Poorly marked entrances, unclear pricing, messy counters, and a confusing purchase process just become "the way it's always been."?

Rather than clean up a sloppy customer experience, you can design a customer journey based on your empathy maps, intentionally building positive experiences into your touchpoints.? ?

Creating a customer empathy map and mapping your customer journey with your team can help raise the awareness and importance of the customer experience.? ?

3. Take Your Team Through an Immersive Customer Journey Map.

We can increase our awareness of customer needs and problems by learning from practices of transportation safety systems.??

In his book Atomic Habits, James Clear describes the practice of "pointing and calling" in the train industry. "The process known as pointing and calling is a safety system designed to reduce mistakes by physically pointing at objects and naming them aloud" (Clear, 2018, p.63).??

He writes, "Pointing and calling is so effective because it raises the level of awareness from a non-conscious habit to a more conscious level. Clear goes on to describe how we instinctively practice this when we are trying to remember something important. We will say to ourselves, "phone, wallet, keys," as we head out the door (Clear, 2018, p.64).?

Applying this to the customer journey, a team can role-play through the customer experience, calling out each customer touchpoint or phase and evaluating their process.?

Is there a customer touch point that is unaddressed???

An unmet customer need in the experience???

A common bottleneck or breakdown point???

This process leads to a deeper understanding of the customer's needs and encourages employees to view supporting the customer experience as an integral part of their role.

4. Use Metrics that Measure Being Customer-Centric?

Once the hard work has been done to design a standout customer experience and develop a customer-centric staff team, what is measured should also be customer-centric. KPIs not only allow a company to track performance but also display its priorities. If only revenue and efficiency are measured, the customer experience will likely suffer.?

Measures to consider for customer loyalty would be the number of new customers, the number of existing customers, and revenue per new and existing customer. Another metric to track would be the net promotor score, indicating the likeliness of a customer to recommend the company to a friend. Adding these numbers to your key performance indicators would measure the value of the firm's customer base and shape the culture of the firm to target customer loyalty over short-term gains.?

Small Businesses Can Leverage the Customer Experience

The advantage of working with your customers closely can be leveraged through applying these principles of design research.

Building a loyal customer base that raves about your customer experience to their friends and family does not take a million-dollar budget.?

It only takes a willingness to put the customer at the center of your business model and engage your customers' needs through your customer experience.

The great thing about design research is that it is accessible to any company willing to put in the effort and empathetically study their customer's needs.?

Today is a great day to start building customer loyalty, increasing revenue, and improving your customer experience.

References:

Clear, J. (2018).??Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones.??Penguin Random House.

Qualtrics, (2023)?Ultimate Guide: Improving customer loyalty. Qualtrics

Kim, W. C., & Mauborgne, R. (2017).?Beyond Ocean Shift: Beyond Competing. Hachette Books.